Wrap-up and way forward
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The document summarizes findings from the Global Forum on Productivity conference held in June 2019 in Sydney, highlighting issues around productivity, market concentration, and the impact of digital technologies. It discusses the crucial role of intangible investments, management practices, and the influence of economic and antitrust policies on productivity and market dynamics. Additionally, it raises open questions regarding competition, industrial policy design, and the implications of technological advancements in the context of global productivity challenges.
Wrap-up and way forward
- 1. Wrap-up and way forward Global Forum on Productivity Annual Conference 20/21 June 2019 Sydney, Australia Christoph Menzel Economic Policy Analysis German Ministry of Economic Affairs and Energy
- 2. “Productivity puzzle” is less mysterious • Adoption rates of new technologies and complementary intangible investment are crucial preconditions to realize the productivity gains of new (GP) Technologies • Management training / practices and workforce composition matter with regard to raising productivity • Artificial Intelligence as potential “game changer” in automation ? Main Take-aways (1)
- 3. Market concentration • seems to be an issue (falling labour share, productivity dispersion, lower investment), but more for the US than for Europe (by now…) • was mainly driven by intangible-intense sectors driven by purchase of ICT service inputs and use of digital services (i.e. cloud computing) • Welfare losses due to markups are presumably substantial, depend on the market structure and efficiency of firms efficient scale of companies! • Entry of new competitors alone is not sufficient to curb concentration / rising markups Main Take-aways (2)
- 4. Main Take-aways (3) Economic/Antitrust Policy can make a difference: • New approaches in antitrust monitoring are crucial (metric of concentration, M&A control, economic fundamentals of concentration trends) • Increase in flexibility in collective bargaining agreements and credit supply for house buyers (while avoiding housing busts) have (at the margin) positive effects on employment, labour income and allocative efficiency (but: ambiguous implications on productivity!) • Measures to encourage companies to participate in Multinational Production Chains increase firm productivity via technology/managerial practices spillovers
- 5. Market Dynamics • What determines the birth rate, exit rate and business growth in the digital age? (Decker et al. 2016) • Why are highly productive companies growing so much faster than lower productive? (Cette et al. 2018) • Which factors drove the drop of innovators in SME? (Rammer et al. 2017) Some open questions remain…(1)
- 6. Competition/Antitrust Policy • What are the drivers of (online) pricing / markups in digital markets? (Díez et al. 2018) • How to measure market power in the age of “zero price”-business models and “algorythmic collusion”? • Evidence and impacts of “killer acquisitions”? (Cunningham/Ederer/Ma 2018) • What are the implications of these forces for economic and antitrust policy? Which policy approaches to curb market power are most effective (least harmful)? Some open questions remain… (2)
- 7. Role of Economic / Industrial Policy • How should “new “industrial policy be designed to enhance growth and productivity most? (Aghion et al. 2011) • To what extend slowing Global Value Chains and weaker international R&D investment affected productivity and impede technology spillovers? • How can industrial policy revitalize global integration while promoting an international “level playing field” and fair competition in the digital area? Some open questions remain… (3)
- 8. GFP Annual Conference 2020 „Market Dynamics, Competition and the Role of Industrial Policy“ 14./15. May 2020, Berlin/Germany
- 9. Aghion, P., J. Boulanger, Cohen, E. (2011). Rethinking Industrial Policy, Bruegel Policy Brief Andrews, D., Criscoulo , C., Gal , P. N. (2016). The best versus the rest: The global productivity slowdown, divergence across firms and the role of public policy. OECD Productivity Working Paper No. 5. Cette, G., Corde , S ., Lecat , R. (2018). Firm level productivity dispersion and convergence. Economics Letters, 166, 76-78 Decker, R. A., Haltiwanger , J. , Jarmin , R. S., Miranda, J . (2016). Declining Business Dynamism: Implications for Productivity ?, Hutchins Center Working Paper 23 Díez, F. , Leigh, D., Tambunlertchai, S. (2018). Global Market Power and its Macroeconomic Implications IMF Working Paper 18/137, Juni 2018 Gutiérrez, G., Philippon, T. (2018). How EU Markets Became More Competitive Than US Markets: A Study of Institutional Drift, NBER Working Paper No. 24700, Juni 2018 Rammer, C., Doherr T., Krieger, B., Schubert, T. (2017). Innovationen in der deutschen Wirtschaft , Indikatorenbericht zur Innovationserhebung 2017 Literature